Workers' Compensation Advisory Council Nov.

16, 2004 Minutes
Voting members: Don Gerdesmeier for Paul Bailey Susan Olson for James Cavanaugh Stan Daniels Wayne Ellefson Mike Hickey Glen Johnson Tom Hesse for David Olson Reed Pollack Brad Robinson Julie Schnell Gary Thaden Ray Waldron Nonvoting members: Sen. Tom Bakk Rep. Joe Mullery Nonvoting members excused: Rep. Dan Dorman Sen. Geoff Michel Staff members: Scott Brener Debbie Caswell Jim Feckey Beth Hargarten Cindy Miner Jana Williams Visitors: Ray Bohn; WCRA Sandy Blunt; Workforce Safety & Insurance David Clark; Western National Inc. Greg Coon Carl Cummins, III; WCRA John E. Diehl; Larkin, Hoffman Anne Green; Workforce Safety & Insurance Kevin Gregerson; Wilson-McShane Judy Hawley, PT; MN Chp. Amer. PT Assn Brian Hicks; MAPS Mara Humphrey; LGN Mary Krinkle; MN Hospital Assn. Tom Lehman; The Lehman Group Tammy Lohmann; Commerce Bob Lund; State Fund Louise Montague; Ergo Results/MOTA Andy Morrison; Koll, Morrison Eric J. Myers; Leonard, Street & Deinard John Nesse; Management Guidance, Inc. Laura Offerdahl; League of MN Cities Robin Peterson; APTA Mark Pixler; MAPS Rob Rangel; Broadspire Erin Sexton; MMA & MN Orthopedic Society Scott Sexton, Corvel Anne Symington; Metro Hand Surgery Assn Joe Vierling; RT

The meeting was called to order at 9:12 a.m. by Commissioner Scott Brener. Roll was called and a quorum was present. Gary Thaden made a motion to approve the Aug. 4, 2004 minutes. Susan Olson seconded the motion. All voted in favor of the motion. Thaden made a motion to approve the Oct. 13, 2004 minutes. Reed Pollack seconded the motion. All voted in favor of the motion.

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IV. A. Commissioner’s update Commissioner Brener said a Notice of Intent to Adopt Joint Rules and Office of Administrative Hearings (OAH) Litigation Rules would be mailed Friday. The official comment period is open until 4:30 p.m., Dec. 22, 2004. The Workers' Compensation Advisory Council (WCAC) members should receive their notices in the mail by Monday. These rules have been worked through between the Department of Labor and Industry (DLI) and OAH for some time. They are primarily procedural in nature and are not controversial, so he did not expect a hearing. IV. B. Legislative proposals Brener said Anne Green would be introduced first to speak about North Dakota border issues. Then Kevin Gregerson would speak regarding collectively bargained agreements and Beth Hargarten would cover the MIGA coverage issue. She has a potential solution Brener thinks works better than others. After they were finished, Brener said he would go though the issues and highlight those that were altered since the discussion at the last meeting. He noted there would be no vote today, but he expected to vote on the 2005 legislative package at the December meeting. North Dakota workers' compensation issues Anne Green, from North Dakota's Workforce Safety & Insurance (WSI), the monopolistic, sole carrier of workers' compensation in North Dakota, spoke on behalf of small North Dakota employers that have, for a number of years, faced potential regulatory entanglement from their temporary or incidental contacts with Minnesota. These North Dakota employers hired workers in North Dakota to perform work, primarily in North Dakota. The reason they came before the WCAC was a matter of equity for a small group of individuals for whom it was difficult, if not impossible, to insure either solely in North Dakota or in North Dakota and Minnesota because of the cost prohibitive nature of insuring in both states. Green distributed draft language for the WCAC to review and discuss. It said if a North Dakota employer hires a worker in North Dakota for work primarily in North Dakota and an injury arises out of temporary work in Minnesota, the sole remedy for the injured worker should be the North Dakota workers' compensation fund or benefits provided through WSI. They limited the "temporary work" to a period of 15 consecutive calendar-days. Sandy Blunt, the executive director/CEO of WSI, noted North Dakota is one of five monopolistic states in workers' compensation in the nation. He said their minimum premium for an employer is $125; 17.5 percent of the employers in their fund are minimum payers. Those less than $500 in premium represent 42 percent of the fund. Those same employers would like to do business and bring their money across the border into Minnesota, but are concerned about the liability of being uninsured. Currently, North Dakota allows anybody who does business in North Dakota the opportunity to bring

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anyone into their state for up to 25 percent of the annual wages of that individual before they have to take out coverage. North Dakota does not want to take on the risk from somebody else. They also want free commerce coming into the state. Therefore, their remedy was offered to everybody in the United States, for up to 25 percent of the person's annual wages. Blunt said they were asking for a statutory change that would allow a North Dakota employee to cross the border for temporary work, which could not exceed 15 consecutive calendar-days. Most companies are small employers that travel across the border to buy goods, or they might do a job for a couple of days and come back across the river. WSI felt this was an amiable solution. Blunt noted they do have a solution on an all-states basis, where they have an AM Best A-rated carrier called the Accident Fund of America in Michigan. They underwrote North Dakota for $600 a policy nationwide in the 45 private states. That will cover an employer for up to 30 days. Most of these small businesses cannot afford even much more than the $125 in premium they are paying into the North Dakota fund. They are certainly not going to take out the $600 coverage. Blunt felt that, on an equity basis, the state of North Dakota is offering others reciprocity. The only state they do not have an agreement with is Minnesota. They thought this could change a lot of the entanglements along the Red River Valley. One third of their employers are located in that area. Thaden noted Blunt talked about small employers, but the language seemed to apply to all employers. He asked whether it would be limited to a certain size employer. Blunt said it was not limited to anybody and it would be any employer. It was limited to 15 consecutive days, rather than size. He noted that, for the most part, most large companies that have employees that are in the state of Minnesota already would pay the duplicative coverage to be covered for both states. Any moderate-sized employer would probably take out the $600 coverage too. Most of the people this would apply to that would be uncovered in Minnesota, or uncovered outside of North Dakota, would primarily be small employers. Thaden asked about the 15 consecutive calendar-days language and asked if he could use this exemption if he were to work Monday through Friday, 52 weeks out of the year, because the language says fifteen consecutive days. Blunt said it said "15 consecutive days," but that is the practice of many who offer all-states coverage. If someone routinely worked in Minnesota, Monday through Friday, and they came back on the weekends, it would be disingenuous to cover that individual. That would be something the North Dakota fund would not cover. The proposal is meant to address the truly incidental situations. Somebody who constantly works in Minnesota, day in and day out, would be advised that WSI would not cover that claim and the employer would have to carry coverage in Minnesota. WSI would side with the regulator when they say that employer is truly doing business in Minnesota. Thaden suggested it be written that way then, instead of "15 consecutive calendar-days." He suggested saying 15 days or so many hours or 15 days a year. Blunt was open to any suggestions. He said 15 days a year might

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cause them to get into more disagreements than they want. They were willing to work with whatever the WCAC felt was an appropriate solution to correct the language. Pollack asked whether the current situation would cost North Dakota more money if this change in the law was not made and asked what the reason was for proposing this change. Blunt responded that they do have a potential for some employers not being able to be covered. Being a monopoly has its good sides and its bad sides. The bad side is not being covered outside of the state. This issue has been around for many years and they feel this is a solution. In addition, they feel if somebody is part of the North Dakota fund, Minnesota’s Special Compensation Fund (SCF) should not bear that cost. Those costs should be brought back to North Dakota, where they rightfully should be paying those claims. They feel this is an opportunity to protect to the fund in Minnesota, as well as rightfully bring those dollars back into the accounts where the premium is being paid in North Dakota. Pollack asked how this would affect a Minnesota employee working for a North Dakota employer coming back into Minnesota to do work under this proposal. Blunt responded that, as the law is currently written, if an individual lives in Minnesota but is hired in North Dakota and works at a place in North Dakota and is injured in North Dakota, they would be covered under North Dakota benefits. Pollack asked what the differences were in the benefit structures between Minnesota and North Dakota. Blunt said the structures were different. Pollack asked what the medical cost coverage differences were and whether North Dakota had a fee schedule such as Minnesota does. Blunt said they have a fee schedule and medical is covered. They will cover an unlimited amount of medical, with no cap. They pay on a fee schedule basis as they work with their doctors on the fee schedule. Blunt said they would be looking at moving to a resource-based relative value system (RBRVS). They think that system is more universal for the medical facilities within this area from Minnesota across. Pollack noted a comparison was made between Minnesota and North Dakota and asked whether Blunt felt their benefit structure was better or less than Minnesota's for indemnity and medical costs. Blunt said they did look at the benefit structures and Minnesota's benefit structure is richer than North Dakota's. The state-wide average weekly wage (SAWW), which controls that within North Dakota, is different than Minnesota's SAWW. When you look at the salaries that were paid along the Red River Valley, they became comparative. If you looked at national studies, they were in the top third of benefits paid. There have been a couple of legislative changes in the last decade that were changing that and it was "sliding." They were fairly close to most when you looked at the maximum benefits. He admitted that Pollack was correct. The structure for benefits on an indemnity side are richer in Minnesota; on the medical side, he would call it a "draw," because both are going to pay full medical. Brener suggested honing the language to address the concerns raised today and bringing the North Dakota language back to the Dec. 8, 2004 meeting. The WCAC members agreed.

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Ray Waldron asked who was affected by this issue, other than the construction industry, and asked whom it would apply to. Blunt said primarily small-businesses were affected, such as one that made bread to sell his product or sends a sales representative to try to find product. The small-employer's margin on that is so tight that, for him to buy the $600 coverage or take a risk of not being covered for workers' compensation, it is not worth it. He would not send any employees over. He would go over when he could himself, because as a corporate officer in the company, he was protected. These are mostly very small businesses; employers such as those delivering pizzas who operate with a tight profit margin. Collectively bargained agreements Kevin Gregerson administers the Union Construction Workers' Compensation (UCWC) program. This program is enabled by Minnesota Statutes §176.1812 and is called collectively bargained agreements. Gregerson presented his proposal, which would allow nonconstruction employers to develop collectively bargained workers' compensation programs. There were two options before the council. The first option was to extend a pilot provision, which has some premium and group restrictions. The second option was to eliminate the language that limits collectively bargained programs to the construction industry. Gregerson suggested the second alternative, which would allow collectively bargained programs to exist for all union employers and their unions. The member's meeting packets contained a handout. A letter from Dave Schrunk, business agent of Teamsters Local 120, who had been a trustee of the UCWC program for some time, was distributed. Local 120 is also a union that represents teamsters at an employer in Minnesota called Super Valu. Schrunk wrote the letter of support asking the council to amend the legislation to allow all employers that are unionized, and their unions, to take advantage of collective bargaining. The packet also contained a list of the trustees for the UCWC program and a list of all of the contractors, unions and insurance carriers that are currently participating in the program. Gregerson noted there are 10 states that allow collectively bargained agreements in the United States. There are only three states that limit that language to the construction industry: Minnesota, California and New York. California recently amended its legislation, which now allows collectively bargained agreements for any industry, public or private employer, with no restrictions on the size of the group or the insurance arrangements. Gregerson suggested Minnesota make this change to allow all employers and their unions to take advantage of this union concept. Gregerson gave background information about collectively bargained workers' compensation programs, per Olson's request.

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Olson asked whether Gregerson had been able to document any savings on attorney fees, because they are going through the faster process, or for medical practice costs for treatment of the injured workers. Gregerson said he could. Using his statistics and comparing them to the department's statistics of what they should have in terms of disputes, the most recent workers' compensation report that the department issued for 2001 indicated the average defense attorney fee is approximately $7,800 per disputed claim. Gregerson figured they have saved about $1 million in defense attorney costs alone. The cost of petitioners' attorney fees is approximately the same number, or slightly higher, at $7,860. Gregerson did not bring those statistics with him and offered to provide them to the council secretary. Gregerson noted the program saves money by getting disputes resolved faster, getting people the care they need faster and getting them back to work faster. If they are unable to go back to their trade, it helps them take that next step in their life and move that claim and their life along. Brener said he personally supports the program. He thought it has proven itself effective and it has been supported by both sides of the table. He suggested this issue be held over for consideration at the December meeting. The WCAC members agreed. Minnesota Insurance Guaranty Association proposal Hargarten presented a brief outline to explain the situation DLI found itself in with the Minnesota Insurance Guaranty Association (MIGA). DLI has talked with representatives from the Department of Commerce, representatives from MIGA and representatives from the Insurance Federation for the past year and they were unable to come to a solution. Hargarten presented a possible solution, to get the council's thoughts about it. She explained there are situations where an employer purchases insurance and the insurance company goes bankrupt. This has become highlighted in the last couple of years, because there have been two principal insurers, Reliance Insurance and Home Insurance, that have gone bankrupt and that brought the issue more to light for everybody. If the employer that had purchased insurance had less than $25 million in net worth, then MIGA would pick up the workers' compensation claims that were previously covered by the insurance company that went bankrupt. However, if the employer has more than $25 million in net worth, MIGA will not cover those workers' compensation claims that were previously covered by the insurance company. That is according to language in another statutory chapter, not the workers' compensation law. Hargarten said there is a hole in the law for these situations and DLI would like to establish who should pay these claims and set out the duties under the workers' compensation law. Under Chapter 176, the employers that purchased insurance are not legally allowed to pay insurance benefits directly. The only two entities that are allowed, under the Minnesota Workers' Compensation law, to pay workers' compensation benefits are workers' compensation insurance companies or companies that have gone through the

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self-insurance approval process with the Department of Commerce. Another complication is that the employers that find themselves in this unfortunate situation are neither self-insured nor are they any more insured. Hargarten reported the other problem is that employers that find themselves in this situation do not know much about the workers' compensation law and are not familiar with the intricacies of the payment of benefits, the timeliness of payment, all of the different permanency issues, the medical issues and so on. Hargarten said the other complication that arises is that these employers that find themselves in this situation are coming to the SCF and trying to receive reimbursements for supplemental benefits and second-injury benefits. However, DLI, by law, is only allowed to make those reimbursements to self-insured employers or insurers and those self-insured employers or insurers had to have paid assessments to DLI. Obviously, this employer did not pay the assessment, their insurance company did. This creates a couple of layers of ambiguity in the law and is creating a lot of questions about who, ultimately, should be responsible to pay these workers' compensation benefits. DLI's goal is to outline in the law the legal liability for the claims and who should be responsible. They want to make sure employers that find themselves in this situation know what their responsibilities are supposed to be. Hargarten reported that DLI came up with seven or eight different options about how to solve this issue and there was not one single option that everyone agreed on. DLI proposed the solution that was, in their opinion, "the path of least resistance." It would add language to the law that states the employers have a choice of doing two things. They either need to go through the self-insurance approval process with the Department of Commerce or they need to purchase a replacement policy from the Assigned Risk Plan (ARP). Hargarten said DLI's understanding during their conversations was that there really was not much of a market for replacement policies in the private insurance market, so they did not want to put a requirement on an employer to go out into the open market to try to purchase something that is not really out there. This proposal would require the Department of Commerce to come up with a new policy. Right now, they do not offer replacement policies and Hargarten was not sure of the magnitude of that task. The proposal would also say that during the process where the employer is either going through the self-insurance application process or trying to purchase insurance, it would be allowed, under the law, to pay benefits directly to the injured worker; however, the employer must use a licensed third-party administrator. Hargarten noted this was a rather complicated situation and, because of various changes in the laws and different statutory provisions, "holes in the law" had developed where a situation such as this just was not anticipated by the language of the law. DLI was trying to close up that hole. Brener explained how this situation came to be in its current state. The law was changed in 2003, so the $25 million differential did not exist prior to the 2003 session. We anticipate there would be significant litigation unless this issue is resolved legislatively. Hargarten noted that there was a bill introduced and heard in the House of Representatives last session, but it only dealt with political subdivisions because this $25

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million net worth had hit some cities and counties. Last year's legislation would exempt political subdivisions out of the $25 million limit. The proposal was heard in a House Committee, but did not make it to the House floor, and was not heard at the Senate. Pollack asked where the $25 million limit came from. He also asked whether this would have been an issue if the limit had not been put into the law. Hargarten said the $25 million amount had been in the law for some time, but not in regard to workers' compensation. The workers' compensation aspects came into the law in 2003. It was her understanding that throughout the United States it is standard to have a net worth limit. Some states are at $15 million, $20 million or $25 million, but it was pretty standard practice throughout the United States to have this dollar limit in there. Obviously, if there were no dollar limit, we would not be having this conversation. All of these workers' compensation claims would end up going to MIGA and they would pay. Thaden asked what the implications were if we were to get rid of the $25 million limit for workers' compensation. He also asked what other states do, since they have this limit. Hargarten's understanding was that if Minnesota eliminated the limit, there would be strong opposition at the Legislature. She had been told by the Insurance Federation and MIGA that they would not be in favor of eliminating the limit. They want standard conformity throughout the United States. Hargarten was not sure how other states deal with the issue Minnesota has, because its issue was not specific to the insurance guaranty law. It was a combination of provisions that are in the insurance guaranty law and very specific provisions that are in Minnesota's workers' compensation law; it was the conflict that had created this hole. Thaden asked about getting rid of the limit just for workers' compensation. Hargarten believed that would still be opposed. Olson referred to the paragraph where the issue of assessments and reimbursements not being available to the employers that fall into this gap was addressed. She noted the proposal did not seem to address that piece of the solution and asked if it were possible to change the statute so that they can step into the shoes of the bankrupt insurer and the assessments that had been paid by the bankrupt insurer then would be applicable to them so they could get those reimbursements. Hargarten said you could draft the language that way. However, they would then still be responsible to pay assessments from that point forward, because there is other language in the law that indicates DLI cannot pay reimbursements unless you are not only current, but up to date. So, you pay all of your past dues, plus be current in your payments. Pollack asked, if a company could purchase a replacement policy, which he found difficult because it was like buying someone's risk that you already know, then what was the sense of having MIGA? Why not just get rid of it and everybody could purchase replacement policies through ARP? Pollack asked if someone from that group could come to talk to the WCAC. Hargarten asked if anyone from MIGA was present at the meeting. Bob Johnson, from the Insurance Federation was asked to come forward to provide some input. He noted he was not from MIGA, but could give some brief

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comments and come to the next meeting, if the WCAC members wanted more details. Johnson said the most important thing was to comment that the $25 million limit was not an insurance industry recommendation. This was in the legislative model regarding how guaranty funds are to operate from the National Association of Insurance Commissioners, which is all of the commerce insurance commissioners of America who govern these laws. Guaranty funds are not unlimited checkbooks to pick up the claims of bankrupt companies. State laws specifically define how many dollars of claims of bankrupt insurers will be paid. The regulators had a series of model acts and one of the model acts, which Minnesota adopted working with the Department of Commerce, had put in place the $25 million asset cap. The decision of the insurance regulators had been that it should be capped. Employers at that size, more often than not, are self-insured. That is the rationale in a nutshell. If you look at the marketplace, you are not going to find too many employers at that asset size that are not self-insured. Johnson said they did not agree that this was a big issue. Employers know their obligations. Large employers move back and forth between buying policies and selfinsuring. They look at the margins and the competitive marketplace and, if they can save money buying a policy, they buy it. If that tightens up, they slide back into the selfinsured column. He said employers moving back and forth, from their perspective, do not have the same need for protection as small employers buying policies. They need the protections and are never going to be self-insured. Johnson said changing the guaranty fund laws by putting this cap in the law was part of improving solvency regulation in Minnesota and around the nation, and most states have done that now. Glen Johnson asked why insurance companies that write a policy in the state of Minnesota do not have to put up a guarantee or surety like other businesses had to do. Any contractor that works for the state has to take out a bond to cover that job to make sure that if they do not perform or fail in some way, somebody pays for it, not the state. If an insurance carrier writes a workers' compensation policy and then goes bankrupt, the state is picking it up anyway if they have less than $25 million in assets. Brener pointed out that MIGA was not a state entity. Bob Johnson noted that when an insurance company goes bankrupt, the other private insurers pay the bill, not the state. When there is a bankrupt insurer, everybody else pays in the market. If it was a bankrupt workers' compensation insurer, the other private workers' compensation insurers pay for it. If it was a bankrupt auto insurer, the other auto insurers pay it. The state did not pay it. Bob Johnson noted the insurance companies did not post a bond, but insurers had to have the financial backing to write a policy. There is a whole set of very comprehensive state laws about capital requirements, assets and money in the bank to be solvent. The Department of Commerce has a whole unit of CPAs and actuaries that regulate the solvency of every licensed company. He said bankruptcies do happen periodically, but not that often. With all of the tools and the protections, things still happen. Brener added a comment that Johnson was right, most of those larger companies were self-insured, but there were plenty that were not and they are starting to discuss possible litigation.

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Thaden noted, if this was a model act from the insurance commissioners, then there must be some other state that had this problem. He said we need to figure out how other states have dealt with this before the council starts arguing which one of the options is best. Johnson said he had not heard from his colleagues from other states, but he had not asked. He said Thaden was right, and a number of other states had the cap and the same system. He said he would find out from each state how their labor and industry department deals with this and what the legal status of the employers was. If anyone had any other ideas, he would bring them to the WCAC. Brener asked Johnson to do that and dig a little deeper between now and the Dec. 8, 2004 meeting. Tom Hesse asked for an idea of what was on the litigation calendar. Brener said he had not seen the exact numbers, but that there were several cities involved and some other Fortune 500 companies are threatening to sue. He could not name names. Hargarten added this was primarily about those companies that were seeking reimbursements from DLI, and the SCF could not lawfully pay them. WCAC bill discussion Brener reviewed the workers' compensation bill and highlighted the issues that had changed since last month. On page 8, item 10 would change the notice requirements for employers whose insurance was about to expire. DLI used the same process as the Minnesota Workers' Compensation Insurers' Association (MWCIA). Brener stated DLI believes it is a waste of time for two entities to do the same thing. He would like to delete those responsibilities for DLI. Brener noted this was in last year's bill and he did not believe this was controversial. DLI was involved with ongoing conversations with MWCIA and were still "tweaking" the language. On page 11, item 3 was about the Tendsetters/Westrom data-privacy changes. Brener said DLI was trying to do some omnibus data-privacy evaluations of DLI. There were challenges at the court level about DLI releasing information. The law is very unclear with respect to data privacy. This issue is not new to DLI or the executive branch. DLI wants to clarify the law; however, Brener noted this has become a bigger issue than was first anticipated, so it was taking longer to come up with an omnibus approach. They were going to continue to work on it, but Brener did not think it would be ready for this session. On page 12, item 4, the Minnesota Department of Health proposal from last month, was about volunteer coverage. They were still working on final language with the Department of Health; Brener anticipated they would have it by the December meeting. Page 12, item 7, the utilization of medical services, we are still working on draft language.

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Page 13, item 8 is a new issue on the legislative list, about adding a presumption that intoxication caused the injury in any case where the injured worker had a blood alcohol content above the legal intoxication limit. Brener brought to the WCAC's attention a recent Supreme Court case, Kowalik, involving an individual who was drunk at the worksite, with a blood alcohol content of .30. The employee fell from a roof and was granted full workers' compensation benefits by the Supreme Court. Brener took issue with this decision. As the commissioner of DLI, he sees fatality reports more often than he would like. When he sees the courts granting benefits to someone who was clearly intoxicated at the job site and who was at risk, not just to themselves, but also to others on the worksite, it made him take pause and think twice about it. His proposal was limited to alcohol. He considered drug usage too, but that was a tougher issue, because drug residue stays in the system longer. His intent was to mirror DWI restrictions and to place some type of greater incentive, albeit, possibly a small one, to achieve a safer workplace environment for Minnesota's constituents. Brener noted his proposal was new and asked for WCAC members' reactions. Hickey expressed concern that this case went through the workers' compensation system to the Court of Appeals and then it went the to Supreme Court and benefits were awarded. He questioned whether the court really looked into the case or whether they stated this as some type of perfunctory judicial review and they were not going to look at the case. In his opinion, the ruling was clearly absurd, because this person could probably not even walk down the street. Brener said OAH ruled that benefits were not to be awarded. The Workers' Compensation Court of Appeals overturned the decision and the Supreme Court affirmed it. Brener clarified that the Supreme Court decision was summarily affirmed, so there was no written opinion associated with it. Mullery said he would have to think about how much would have to be proved to overcome the presumption Brener wanted to put in the language. It should not be very much; it should be a very limited presumption if you are going down that road. He said it definitely should not be down to the .08 level for the driving standard. Thaden expressed an opinion that if our driving laws allow a person to drive who was as incompetent as somebody who was drunk, then we should address that problem in that part of the statue, not change the part of the statute that deals with drunk driving. It was absurd to him that somebody could be considered a good worker and be at .30. Part of the onus on this was the employer not doing a good job of supervising. In some ways, you could say their workers' compensation rate would account for the fact that they allow absurdly drunk people to be on their job site, including working on roofs. He said, beyond that, we need to make a statement that, at the very least in a court case, you do not have to show direct evidence that somebody was impaired, for workers' compensation purposes, at .30. Brener noted the employer was not insured and the claim goes to the SCF. Brener's issue goes to safety in the workplace more than anything else.

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Susan Olson strongly agreed that the WCAC should address this and add a presumption of intoxication when you have reached the legal limit. Public policy says we need to set a black and white line and, if there is a black and white line for driving laws, there is absolutely no reason we should not have one for workers' compensation injuries. Don Gerdesmeier asked, if the employee was not entitled to workers' compensation, whether that would open it up for the injured worker to sue if he was not covered under the state's workers' compensation law. Members agreed that was a good question; Brener said that was a detail they would have to work out. Waldron expressed appreciation for the discussion and said the WCAC should do something, but that he wanted to move cautiously. If there was a bad employer and a bad employee, everybody was paying for it and all of that should be kept in mind. Brener stated this was not a unique concept and it was being done in other jurisdictions. Members agreed to look at the proposal. Daniels said he did not condone drinking on the job. He had a case when he was the local union president where there was a fatality and the employee was intoxicated. He said the investigation showed the employer and the employees who worked with that individual knew he was intoxicated, including the foreman. In Daniels' opinion, if that happens, the workers' compensation system should take effect, because the employer and his fellow employees allowed the employee to come onto the worksite. If you put in a law like this, and the injury became a fatality, you are just penalizing the family. With good management and employee relations, you should not allow that person on the job; but if they do and an injury occurs, the employee should be covered under the system. Susan Olson responded to Daniels remarks. She noted that, while the person in that situation may not be covered under workers' compensation, it did not preclude the family from bringing a wrongful death act under a civil lawsuit, which would include pain and suffering, and the person would recover more money. She noted the current statutes say that if somebody is intoxicated, they are not supposed to get benefits. What happened in this case was somebody was intoxicated and the judge "looked the other way" and awarded benefits anyway. This proposal is not something different from what the statutes said; it is just narrowing it down and getting a black and white line that the judge can use. If the employer is at fault, the person could always step aside and not accept the workers' compensation benefits and sue under the litigation system. Mullery asked if this went into effect whether it would shift the costs for the hospital and the medical care onto the taxpayer if the injured person did not have assets. Brener said he assumed this would go under the general health policy. Hargarten noted the costs would be different; workers' compensation pays indemnity benefits, not just the medical benefits and there was no other system out there that would pay indemnity. If the person was a very low-wage earner and would be eligible to receive medical assistance coverage, then, in certain circumstances, the costs could be shifted into the medical assistance system.

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Thaden noted there were a lot of points of view about specifics that they did not have, because there was no language in front of them. He suggested DLI put together an outline of what the present law is and what other states do, and get a few ideas of what could be done in light of this discussion. He suspected this would not be done by the December meeting. Hargarten said the current law said that if drinking or the employee’s intoxication was the proximate cause of the injury, then the employee does not receive workers' compensation benefits. What the court said in this case was that there was not enough evidence to prove that his .30 level was the proximate cause of the injury. Hickey thought it sounded like the Supreme Court gave this case a cursory review and really did not review this decision the way they needed to. He asked if that was what happened. Brener responded that he could not speak for the court. Hickey noted Hargarten gave a reading of the law and this decision never should have been made, now the WCAC was trying to pick up the pieces. When somebody does not interpret the law right or if judicial review fails you, what do you do? Hickey expressed appreciation to Brener for trying to come up with some other language that would not allow any judge to ever make a ruling this bad and said he would try to work with DLI to find a remedy. Brener said DLI would work on the list for the December meeting. Glen Johnson made a motion to adjourn at 10:20 a.m. Susan Olson seconded the motion. All voted in favor of the motion. Respectfully submitted, Debbie Caswell Executive Secretary dc/s